The Central Bank of Nigeria’s Monetary Policy Committee (MPC) has increased the interest rate by 18.5 per cent to 20.5 per cent from the initial 18 per cent in March despite rising inflation in the country.
The increment in interest rate was announced on Wednesday by Governor of the Central Bank of Nigeria, Godwin Emefiele, during the MPC communique presentation and Analysis.
According to Emefiele, the decision to increase the interest rate was to curtail the rising inflation in Nigeria.
“Our actions to increase the MPR rates are potent because the inflationary pressures you see today confronting us are a global phenomenon and this started in 2022”, he stated.
In March, the policy-setting committee raised the MPR from 17.5 to 18 per cent in February to tackle inflation. However, despite the continued hike of MPR since last year May, the inflation of Nigeria had increased to 22.22 per cent in April 2023, according to the National Bureau of Statistics.
The MPR is the baseline interest rate in an economy on which other interest rates within that economy are built.